Tuesday, July 30, 2013

Thanks Encana Oil & Gas for the Abandoned Well Under our City Park! Courtesy Matters...

A stunning, but very common case of oil and gas courtesy brought to you by Encana Oil & Gas. In Erie, Colorado, a city park has a plugged and abandoned natural gas well under the surface where children play. Hundreds of homes surround the park where the abandoned well is located with some homes as close as 100 feet away.

The accuracy of this once producing natural gas well is supported with the official Colorado Oil & Gas Conservation Commission (COGCC) 'Application to Permit to Drill' in December 1981 with its precise location. This well was initially owned by Vessels Oil & Gas Company which later sold the lease to PanCanadian Energy (Encana Oil & Gas). API: 05-013-06106

What kind of gesture is it to cover up an abandoned natural gas well and build a playground on the land? How could the city approve of such a probable danger to the public at large, and the children who play on the property?

Click image to enlarge
(Note the dates of the images)

Abandoned oil & gas wells have historic problems and safety concerns as defined by the COGCC.  A recent case dated Jan 13, 2011 in Florence, Colorado an official report was filed by the COGCC to 'Request emergency funding for explosive levels of thermogenic, wet natural gas into and under occupied residential homes from plugged and abandoned wells.' ORDER NO. 1E-10

Below are snippets from the official COGCC Findings document. LINK


                               3. Soil gas surveys in portions of said Sections 15 and 16 were done prior to and then again subsequent to the plugging of the orphan well.  These soil gas surveys were funded using Appropriation 076 funds for special environmental projects.  The follow-up surveys indicate that soil gas concentrations around and under residences have not decreased subsequent to the plugging of the orphan well.  Five homes are located over or in close proximity to the gas seeps. 

                        4.  COGCC Southern Colorado Field Inspection Supervisor Mike Leonard identified small circular areas of stressed vegetation in the late fall of 2010 in close proximity to oil well locations interpreted from the 1909 USGS records.  He also determined gas was actively seeping from one of the stressed vegetation areas.  He also determined that explosive levels of methane were present in the shallow soils immediately adjacent to one of the mobile homes in the area. 

                        5.  COGCC Staff propose to investigate and determine the sources of gas seeping in this residential area.  The investigation will include detailed investigations of the gas seeps.  Trenching and excavating will be the primary method used to locate orphaned well bores.   Flux surveys of gas seepage volumes will be done simultaneously with trenching and excavating to better locate the sources of gas and the directions in which the gas is migrating.  Other tools that may be used are magnetometers, ground penetrating radar as well as handheld infrared or other gas leak detector devices.  Sampling and characterization of gases from seeps and oil wells in the area will also be used to better understand sources of the seeps.

                        6.  COGCC Staff also propose to aid the local residents to better ensure immediate safety in their homes by purchasing and installing gas monitoring devices as needed.  Other passive mitigation measures may also be used such as venting of combustible soil gases away from homes and residences. 

                        7.   This project designed to ensure human health safety and welfare has estimated costs and expenditures of $67,000.   As described in Finding No. 1, funds for this project are not available from Appropriation 075 which is used for environmental response or from Appropriation 076 which is used for special environmental projects in this fiscal year.  COGCC staff believes that this project needs to be done as soon as practicable due to the potential risk to human safety posed by gas believed to be leaking from orphaned oil wells in the area. 


Click images to enlarge

There are approximately 79,000 abandoned oil and gas wells in Colorado.  The question you need to ask yourself is: 'Do I have any abandoned wells near my home?'

All cement wellbores WILL fail over time. It's the nature of things. 


Monday, July 29, 2013

REVISIT: Subsidy Gusher: Taxpayers Stuck With Massive Subsidies While Oil and Gas Profits Soar

May 17, 2011

There are a couple of basic truths about oil and gas companies today--they are highly profitable, heavily subsidized, and well-connected in Washington. While this scenario makes for a very lucrative business model, it has and continues to needlessly cost taxpayers billions. Now that the deficit and debt limit are pressing our budget to its limit, these outdated and unnecessary giveaways must end.
Oil prices are predicted to remain high, all but locking in the high profitability of the industry. Just this spring the average price per barrel has been on the rise. In February the average price per barrel was $89, in March $103, and in April it reached $110. For the next two years the average price per barrel is projected to remain over $100. Natural gas prices are also predicted to increase in 2012. These high prices spell a good financial situation for oil and gas companies and provide marked incentive for production.
With these prices in mind, it seems reasonable that these companies don’t need to be heavily subsidized, but the oil and gas industry’s Congressional ties run deep. Because of these ties they have been able to maintain their special deals for nearly a century.
Not surprisingly, oil and gas companies have spent hundreds of millions of dollars over the past decade in an effort to lock in the preferential treatment they receive from Washington. Since the start of the 2002 election cycle, the oil and gas industry has donated $138.7 million to the campaigns of elected officials in Washington, according to the Center for Responsive Politics. Compared to other industries in the energy and natural resources sector, oil and gas is the biggest player by far in terms of campaign contributions and lobbying. By comparison, the mining industry, which also enjoys government subsidies in different forms, spent $32.3 million in campaign contributions during the same period. During just the 111th Congress (2009-2010), oil and gas companies spent an additional $321.3 million on lobbying expenses – approximately $440,000 a day – and employed at least 798 lobbyists, more than one lobbyist per member of Congress. In the first quarter of 2011, the industry spent $39.6 million on lobbying, more than almost every other industry.
For a long time the oil and gas industry has had the system working to their advantage. But it is the job of Congress to protect the taxpayer, not the special deals of the oil and gas industry.
Subsidies, Subsidies, Subsidies
During World War I, U.S. taxpayers provided the oil and gas industry with its first federal tax break. Over the decades, more lucrative tax breaks have been added. The latest major installment came with the passage of the 2005 Energy Policy Act, which included another $2.6 billion in subsidies for oil & gas companies. But it hasn’t stopped there. As recently as December of 2011, oil and gas companies received more subsidies. Each year the oil and gas industry takes advantage of tax breaks and other subsidies worth billions of dollars. In all, oil and gas companies are expected to receive more than $78 billion in industry specific and general business subsidies over the next five years.
The first of the federal subsidies provided to the industry came with the establishment of the intangible drilling costs tax credit in 1918; other tax breaks including the geological and geophysical tax break were enacted as recently as the Energy Policy Act of 2005 (EPACT05). Other recent subsidies came in the Emergency Economic Stabilization Act of 2008 and the volumetric ethanol excise tax was just extended in a tax package passed last December.
The subsidies included in the table above cover a range of tax breaks and other government support for the oil and gas industry and their estimated benefits to the oil and gas industry over the next five years. This analysis includes tax breaks and subsidies that are industry specific as well as those that disproportionately benefit the oil and gas industry. The general business tax breaks for oil and gas are listed above in Table 2 and include the section 199 manufacturing deduction enacted in 2004 and last in, first out accounting method (see: general business reform). These subsidies should be repealed across the board and in this analysis we include the amount of these breaks that benefit the oil and gas industry. We also include the Foreign Tax Credit which should be reformed to only enable credit for true income taxes paid to foreign government and not taxes that were in exchange for an economic benefit.
The subsidy calculations come from the Joint Committee on Taxation, a non-partisan congressional committee that tracks and assists in the legislative tax process, the Office of Management and Budget, and industry sources. For more detailed information on the subsidies included please see Appendix One.
Profits, Profits, Profits
Over the last 130 years the oil and gas industry has established itself as a mature financial powerhouse both domestically and internationally. It has made a significant portion of its wealth by extracting billions in profits from oil and gas removed from taxpayer-owned federal lands and waters.
In the last ten years oil companies have been particularly lucrative for the industry, with the top five companies garnering more than $850 billion in profits (see table below).
The oil and gas industry has also shown itself to be more than resilient in the face of what would have easily put other industries out of business. While the economy took a downward spiral for just about everyone in 2008, profits continued to come in for oil and gas companies.
The largest oil spill ever, in the Gulf of Mexico, also appears to have little impact on the profitability of oil giant BP. In the face of what for most companies would spell economic ruin, BP quickly emerged from the red with two straight quarters of profits amounting to more than $6 billion. BP was able to write-off billions of the costs related to its oil spill clean-up in 2010, significantly decreasing their tax burden. The company lowered its taxes by $13 billion because of costs related to the oil spill. This effectively means that taxpayers subsidized BP and its clean up of the oil spill that it caused.
Other oil companies have consistently done well over the last decade. In 2010, net profits for the largest oil and gas companies (Shell, Exxon, Total SA, BP, Chevron) were $76.8 billion – a $12.4 billion increase from 2009 profits and a 49.7% increase from just a decade earlier.
With the price per barrel of oil having eclipsed the $100 mark again this year and predicted to stay there, Big Oil will rake in billions of dollars more in profits these next few years. In 2008 with high oil prices: Exxon posted the largest annual corporate profit in U.S. history, Chevron became the second most profitable company in the U.S, and the five companies listed above hauled in nearly $150 billion.
Clearly these companies do not need taxpayer subsidies.
Subsidies Must End
After more than a century to establish itself, the oil and gas energy sector should clearly be able to stand on its own two feet without taxpayer handouts. Congress must act to end the siphoning of taxpayer dollars to powerful energy companies. Taxpayers cannot continue to perpetuate an endless cycle of subsidies.
If we continue on with business as usual taxpayers will be on the hook for an additional $80 billion in subsidies over the next five years. It’s time to stop rubber stamping age old policies and enact meaningful reforms.
The 112th Congress came into office promising to reduce our deficits and debt and to reroute our current fiscal course to a sustainable one. To do this, Congress needs to target inefficient, ineffective, and wasteful programs that deplete the nation’s treasury and cause a fiscal nightmare for taxpayers.
For more information, please contact Autumn Hanna at (202) 546-8500 x112
or autumn [at] taxpayer.net

Appendix One: Oil and Gas Subsidies Summary

The numbers in Table 1 project future costs for selected oil and gas subsidies for fiscal years 2011-2015. These values and projections are based on reports from government agencies including the Joint Committee on Taxation (JCT), the Office of Management and Budget, and industry data from the American Petroleum Industry Association. In general, government data on federal spending for subsidies and tax incentives to the oil and gas industry is highly decentralized. Government tracking and reporting of these subsidies is spread across multiple agencies that do not observe a standard methodology for calculating costs.
Volumetric Ethanol Excise Tax Credit
In 2004, the American Jobs Creation Act implemented the VEETC to replace these two historical subsidies as a combined excise tax exemption and tax credit. The tax credit is worth 45 cents per gallon of ethanol blended with gasoline. Under the recently enacted Renewable Fuels Standard, the U.S. is required to blend up to 15 billion gallons conventional corn ethanol with gasoline by 2015. Assuming ethanol production reaches the mandated cap every year, it will cost $31.05 billion from 2011-2015.
Intangible Drilling Costs (Expensing of exploration and development costs)
Created in 1918, intangible drilling costs (IDCs) include all expenditures made for wages, fuel, repairs, hauling, supplies, etc that are incidental to the drilling of wells and the preparation of wells for the production of oil and gas. While most costs that bring future benefits must be capitalized according to the Internal Revenue Code (IRC), IDCs are an exception that can be expensed in the period the costs are incurred. Special rules are provided for intangible drilling and development costs so that these costs can either be expensed (current deduction) or capitalized (current law). When the decision is made to “expense” the IDCs, the taxpayer deducts the amount of the IDCs as an expense in the taxable year the cost is paid or incurred. If the IDCs are capitalized, they are generally recovered through either depreciation or depletion. The President has proposed eliminating this tax break and the JCT estimates this would save $8.963 billion from 2011-2015.
Royalty Relief
Oil and gas companies that drill on public lands or off-shore pay for the oil and gas they remove in the form of royalties. Because of out-dated energy policy, oil and gas companies often pay little or no royalties to the owners of the resources. Additional royalty relief was enacted with the Deepwater Royalty Relief Act of 1995. Most of the leases granted under this act contained price thresholds such that when the price of oil was above the threshold, royalty relief would not apply. However, the contract language for 1998-1999 failed to contain price thresholds, leading to a huge windfall for those leases. Annual reports of the Minerals Management Service (MMS) from 1998-2009 report $2.14459 billion in “royalty free” oil and gas production and estimate the royalty free production for 2011-2015 will total $4.365 billion for oil, $159.867 million for gas (deep gas) and $2.384 billion in gas (deep water).


Monday, July 22, 2013

Unfavorable Economics for Local, Wet Natural Gas

Letter to COGCC's Director Matt Lepore - Unbecoming an Officer of the State

Dear Matt Lepore:

(Lepore originally made the statement at an energy summit in Loveland this week. According to The (Fort Collins) Coloradoan, Lepore said that residents who “storm city hall and demand you protect their health, safety and welfare” fail to connect how banning fracking would affect natural-gas prices.)

Although I appreciate you 'backtracking,' your comment has struck a sour note with citizens nation-wide.  Indicating that the price of natural gas is worth far more than the price of our inalienable Civil & Constitutional Rights is reprehensible. The people of Colorado and other 'fracked' states are continuously struggling to protect themselves from the harmful adverse impacts the largely unregulated  oil and gas industry imposes on our ways of life.  The COGCC appears to have only succeeded at one element of its mission statement to: 'protect correlative rights of mineral owners and that of the oil and gas industry.' Please understand that the price of natural gas will never increase when a single city bans fracking. Such statements are merely scare tactics that are absent of reality.

If you are unaware of the urgency, let the citizens inform you that 'storming a public place' operated by tax payers dollars to demand that our health and safety be protected is essential and a Constitutional Right. It's the nature of not being listened to in a meaningful, humane and civil way. Our rights to safety and protection have been taken away from us via federal oil & gas exemptions. 

Reminder: I had >75 active wells within a 1 mile radius of my house in Firestone. I lived in hell for two years there. I had a bloody nose for nearly 1.5 years, migraine headaches, GI problems, burning eyes and throat and other issues. I've since moved far away and my symptoms have subsided greatly or altogether.  Anecdotal physical symptoms from living that close to hundreds of tons of endocrine disrupting and carcinogenic chemicals is a real, factual observation, not anecdotal.  You have never experienced it, so please have decency and humility to those who cannot move and are being willfully poisoned by the industry's exemptions and mishaps.

Being that you are paid by our tax dollars, it's unbecoming of an officer to make such biased statements as you did.  You cannot erase it.  If you would like to meet sometime to better understand the failures of the COGCC's past to ensure a better, more well protected future, I am available. We can only succeed when we know our failures.

Wealth over health is the wrong way to operate and it's inhumane.

Thank You,

Shane Davis

Tuesday, July 16, 2013

Letter to Weld County Commissioner: Barbara Kirkmeyer | ( Kirkmeyer claims no groundwater contamination from oil & gas)

Dear Barb Kirkmeyer et al.,

Your recent comment in theColoradoan.com http://www.coloradoan.com/apps/pbcs.dll/article?AID=/201307161604/NEWS01/307160017 you state: 'Fracking detractors are trying to “scare the crap out of everybody with the wrong facts and making things up,” said Weld County Commissioner Barbara Kirkmeyer, '  “They’re out there saying all sorts of things about how it’s contaminating the groundwater, and you know, that’s not true,” Kirkmeyer said.

I'd like to inform you that your assertions are inaccurate, and without merit in regards to groundwater contamination(s) in Weld County as a result oil and gas operations. Your claim that oil & gas operations do not, and have not contaminated groundwater are simply unfounded.

I’m rather surprised that you, in your elected seat, appear to not have conducted due diligence by reviewing official COGCC data showing that Weld County not only has hundreds of groundwater contaminations, but the Laramie-Fox Hills aquifer was also officially documented by the COGCC as contaminated by an oil and gas operation in 2009 with thermogenic methane, and an EPA known frac fluid, toluene. LINK: http://www.fractivist.blogspot.com/2012/10/colorado-aquifer-contaminated-by.html 

COGCC LINK: http://cogcc.state.co.us/cogis/FacilityDetail.asp?facid=12311848&type=WELL

I recently published a peer reviewed study of 1,000 randomly sampled, officially documented oil & gas operator spills in Weld County which indicate that 43% of all spills in Weld County resulted in groundwater contamination. DATA: http://www.fractivist.blogspot.com/2012/10/17-million-gallons-of-toxic-oil-and-gas.html

I’ll provide you with a recent, example, to demonstrate how common groundwater contamination occurs in your backyard, Weld County. Here is a link to an operator spill from July 9th 2013 where the COGCC indicates that groundwater was in-fact impacted. LINK: http://cogcc.state.co.us/cogis/SpillReport.asp?doc_num=2614363

Another Case of groundwater contamination:

Another Case of groundwater contamination: (You may have to contact the COGCC to have them reformat the document so that you can open it and view it) It's cumbersome for the general public, we know, and it's a disservice. 

Analytical results for operator spill above: (partial images below) http://ogccweblink.state.co.us/DownloadDocument.aspx?DocumentId=2164154

In conclusion, It is very harmful that you continue to proceed without the cautionary principal, and as a result it appears you are grossly misinformed thus grossly negligent in preventing adverse impacts to the environment and to the residents of Weld County.

Please let me know if I can supply you with hundreds more groundwater contamination cases from Weld County.

Shane Davis
fractivist at large
former Weld 'Well' County resident

Click documents to enlarge

Monday, July 15, 2013

Which side of the road are you on?

Have you ever driven through Weld County before and noticed the toxic wasteland that riddles its once beautiful agricultural area? Did you notice the more than 20,000 active oil and gas wells that are mere feet from homes, hospitals, playgrounds, dairy farms and more? While keeping this in mind, let's not forget that 43% of all operator spills in Weld County resulted in groundwater contamination and millions of gallons of toxic liquid industrial waste has never been recovered from the environment. Those toxic chemicals are still in the environment.

Weld County has been a poor leader in preventing adverse environmental and human health impacts from the largely unregulated oil & gas industry. Although Weld County purports its receiving tens of millions in revenue from mining activities, still one of every four children go hungry according to the Weld County Food Bank. Property values will plummet, groundwater contaminations will continue to rise, and there is no doubt that the residents of  Weld County are discreetly being 'gassed' from the hundreds of tons of volatile organic compounds and hydrocarbon vapors that are being released annually.

The industry and the state continue to say: 'There are no adverse health effects, they are anecdotal, and the air is fine.' This statement is without merit on all levels. The people that are experiencing burning eyes, sore throats, headaches, GI problems, and more are not being listened to. They are 'observing' these types of issues while physically being in Weld County. The 'observations' appear to subside when the person has an extended stay outside of Weld County. Anecdotal?

Question: Which side of the road do you want to live on? The  un-colonized side, or the toxic unregulated wasteland? If you are a resident of Larimer County and want to help protect it from fracking, please contact me to get started. fractivist@ gmail dot com

One last thing: Governor John Hickenlooper, you cannot have 'both' without putting a fence around 'one.'


 Click image to enlarge

email fractivist@ gmail dot com to help save Larimer County.


Thursday, July 11, 2013

Colorado Counties Want To Form 51st State To Avoid Environmental Protections

By Nicole Flatow on Jul 11, 2013 at 3:00 pm

At least ten rural Colorado counties are taking aggressive steps to form a 51st state, saying their interests are not being met by moves to regulate the oil and gas industry, increase renewable energy, and better regulate guns. Organizers in Kansas and Nebraska are also interested in joining the state they call “North Colorado.”
Organizers met this week to draw up boundaries of the new state, as part of an ambitious schedule to draft a ballot initiative by August 1, and get a proposal before the voters in November. Congress must approve admission of a new state into the Union. But the U.S. Constitution also requires that secession of parts of any existing state be approved both by the voters and legislature of that state. This means Colorado would have to approve of the counties’ secession, as would Kansas and Nebraska if parts of those states wanted to join. One of the ten counties that initiated the movement, Weld County, is larger than Delaware and Rhode Island, according to a county commissioner.

Bring it, oil and gas.  We will stop you right in your tracks in every humanly legal possible way. Citizens will surge and re-establish their civil rights. You will face a resistance you have never seen in recent history.  You will not destroy our ways of life and continue to remove our civil rights. We will protect ourselves and we will protect our neighbors. 

We do not want your toxic industrialization in our neighborhoods. We do not want your lies. 

Thursday, July 4, 2013

East Boulder County United to Submit Lafayette Community Rights Act to Ban Oil and Gas Extraction

For Immediate Release:

East Boulder County United to Submit Lafayette Community Rights Act to Ban Oil and Gas Extraction

Cliff Willmeng (303) 478 – 6613
Merrily Mazza (720) 556 – 1286
Rick Casey (303) 345 – 8893

Where: 1290 S. Public Road, Lafayette Colorado, Lafayette City Hall
When: Tuesday, July 9, 11:00 am
What: Press Conference and Rally

East Boulder County United will conclude its petition and signature drive on Tuesday, July 9th, and submit the Lafayette Community Rights Act officially to the City of Lafayette. The Act will create a community Bill of Rights that will explicitly legislate our community’s right to a safe environment and self-determination, and will ban the extraction of oil and gas, and the disposal of associated waste products within Lafayette city limits. East Boulder County United maintains that modern oil and gas extraction is an inherently dangerous process, and that the rights and safety of our community are superior to the private interests of the oil and gas industry.

Approximately 2000 Lafayette voters signed the ballot initiative--more than double the required signatures required to place the Lafayette Community Rights Act to a direct vote of the community.

After one year of research, education and organizing, it has become clear that modern oil and gas extraction, through its use of hydraulic fracturing, would fundamentally alter the quality of life, property values, community well-being, and public health and safety of Lafayette. East Boulder County United believes that these issues are the highest priorities within any community, and that the people of Lafayette have a fundamental right to determine our future without threat of industrial trespass.

East Boulder County United sees the effort to protect the people and environment of Lafayette from oil and gas extraction as part of the larger movement throughout Colorado to reestablish the superiority of community rights over corporate interests. We explicitly endorse the initiatives in Broomfield, Loveland, and Fort Collins to overcome the threats of the oil and gas industry assert public health and safety as the highest community objective.

East Boulder County United will now begin the campaign to educate our community further on the dangers of oil and gas extraction and advance the discussion of community versus corporate rights. We invite all community members, professional organizations, churches, and local businesses to join us in this effort.

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